tv Nightly Business Report PBS April 15, 2019 5:00pm-5:31pm PDT
>> this is "nightly business report" with sue herera and bi griffith. >> nearing new highs. the market sits close to a record and individual investors haven't been tbeat in a while. billions at stake. apple and qualcomm meet in court as the two tech titans argue over a long simmering patent dispute. tax day. it is time to pay uncle sam. but who know v oow the most and got the biggest break? those stories and more tonight on "nightly business report" for monday,pril 15th. good evening, everyone. bill griffith is off this evening. don't look now, but the major averages are sitting near all-time highs. this despite today's dip. earnings from goldman sachs and citi group did little to spire
more on that innt just and a mo but first the closing numbers. the dow jones industrial average was down 27 points to 26,384. the nasdaq fell 8 and the s&p 500 was off 1. but investors have been inspired this year. the dow is up 13% driven by a switch in the fed's outlook, a drop in thed likelihf a recession, low unemployment, and healthy sentiment. and that sentiment is being seen among individual investors. according to the american oassociation individual investors survey, expectations that stock prices will risethver next six months jumped to 40.3%, rising above its historical average for the first time in six weeks. a recent e-trade surveyrad simi findings, and joining us now to discuss all of this rising bullish sentiment is nancy tangler, a chief investment strategist. welcome back. nice to have you here. >> thank you, sue. good to here. >> what do you attribute the
rise in sentiment and therefore theise in stock prices? >> well, i don't want to be cynical, but oftentimesee investors most bullish, particularly individual investors, after the market has gone up for an extended period of time. so i think what you're seeing is sort of the other side of t e kw equation of what we saw in pessimismunfettered there and now maybe not 'tfettered but off. so i dhink it's the right time for investors to be chasing stocks here, but i am bullish for the intermediate and long term, actually. >> o thing that caught my ey in one of these surveys is bearish sentiment or expectationsha stocks will fall over the next six months plunged almost eight points to 20.4. that'sy pre low. and sometimes that means we're in for a turn in the mark. what do you think? >> like a contrary, you mean
that investors turn negative sue, is that what you meant? >> yes. >> i actually spe ahese meetings around the country. i love the folks because ey're vy engaged in their own investments, but i do think it's important for iestors or eryone to look at these sentiment numbers as sort of backward looking. i get more concerned when the bullish sentiment the over 50 t becaust tells me there's too many people chasing the market here. but the bearish se mean, i guess you could say it i'mes the same response concerned that investors are going to chase here when they sh be sitting back and then when stocks do get the inevitable correction, as we will at some point thisyear, they'll begin to panic and sell, and that's exactly the wro thing tdo. >> on that note, nancy, thanks so much. >> thank you. >> butcher joseph asset management. more on those bank earnings. dow compone goldman sachs reported better than expected earnings but revenue fell short.
e bank cited lower revenues in client services and investment and lending businesses. but the ceo discussed an improvement in market activity. >> in terms of market activity and client engagement, there was significant pick nextel cup the second half ofhe quarter and given the environment we're in, that pickup cerinly continued. i preface this only two weeks into the quarter so it's hard to take any forward judgment on that, but i think that activity level certainly improved meaningfullyn the second half of the quarter. >> the stock fell more than 3.5% trading today. citi reported a mixed quarter. e itsnings were held by share buybacks and revenue fell. citieported a drop in expenses and is counting on a turnaround in itsonsumer business, particularly credit cards and retail banking to increa its erall returns. ceo michael corbett says the bank is making progress towards
it financialtargets. shares fell a fraction in today's session. the predent of the chicago fed said today that interest rates couldta where they are till the fall of next year. now, that would help insurers if inflation remains at healthy levels. in an interview this morning, he added that the economy is doing fine. >> fundamentals continue to be quite good, so anybody who is overly concerned about a downturn, i was reverlly concerned about that. i did think that inflation is a little weaker than i would like to seeon given s labor markets, low unemployment rate, wage growth has picked up, so a lot of fundahantals support continued strength in the consumer. i'm looking for growth in 2019 on the order of trend growth, which 1.75% to 2%, decelerating from last ar's 3% growth, but yeah, the economy is doing fine. >> evans is a voting member of
the federate committee. is> waste management is buying advancedsal for about $3 billion in cash, bringing together the numberne and the number four companies in that sector. the move would expd waste management's footprint in the eastern united states. it is one of the biggest solid waste company acquisitions in more than a decade. both stocks rose in trading today. advancedsa dis was up nearly 18%. drug manufacture is buying paragone bio svices for a little more than $1 billion. the all-cash deal wil t helpm expand its gene therapy manufacturing operations. a fast gwing area of health care. geneai therapy id to replace defective genes with healthy ones. shares got a 13% boost today. apple and qualcomm are facing off in court. the two companies began their massive multibillion-dollar patent trial today. it is a lo-simmering dispute that will nown be o full display
for all investors to see. josh lipton is at the courthouse in san diego tonight. >> apple andom qua have been fighting each other for more than two years with billions to-dollars on the line. they're expected to be star witnesses from both sides. the best known appleim ceo cook and qualcomm founder erwin jacobs. at the heart of this case, apple claims that qualcomm monopolies the market for chips, a critical component in smartphones, extracting what it calls and qualcomm owes apple $1 biion. more importantly, apple also challenges qualcomm's pate royalty rate. qualcomm s chips, but it also licenses patents for a royalty on therice of each phone. for apple, that meant paying qualcomm a royalty rate of $7.50
for each device. >> they have an obligation to offer their patent portfolio on a fair, ndreasonable, nondiscriminatory basis, and they don't do that. they charge high prices and have a lot of different tactics. ut the chipmaker says that apple contributed virtually nothing to the development of core cellular technology, built its products on the back qualco innovation, and is now justrying to pay far less than fair value for qualcomm's technology. it's seeking more than $15 i billio damages. this case will decide how much apple gets to keep from each iphone sold. that's especially important now with iphone sales under pressure. but analysts say this case is even more important for qualcomm. >> it hits right at qualcomm's highest profit business, which is licensing. so if on appeal, they end up
losing, that could mean that customers would pay less for thr intellectual property and that revenue and profits would go down. now, i think that qualcomm has been doing licensing for a long time and ty're very smart about it. i do think that they would find a way to monetiz it. we'll have to see. >> jury selection started today. this trial could last until may 15th. forsi "nightly ss report," i'm josh lipton, san diego, california. and to another story in the news, that wall street and just about everyone watched unfold today. and that is the burning of notre dame. a massive fire engulfed the parisl. cathed video showed flames leaping through the roof. spire, reached t which eventually fell to the ground. there was no immediate word on the cause of the blaze. the structure was undergoing a project.lion renovation french president emmanuel macron said, quote, i am sad this evening to see this part of us
burn. the structure dates back to the 13th a century was completed in the 15th. time to take a look at today's upgrades and downgradesa wello hit with a number of downgrades following its earnings report last week including one from goldman sachs, which lowered its rating to neutral from buy. e analyst is less convinced they'll hit financial targets 20 for the rest o. th price target is $48. the stock rose a fraction to $46.77. cbs health was downgraded to perform from outperform a oppenheimer. the analyst cites drug pricing headwinds andunfavorable exposure to the managed care business. the firm removed its $85 price target b it rose more than 2.25%. >> nokia was downgraded to sell from neutral at goldmsachs. the analyst cites more muted growth i its patent business. the price target is $5.50. it closed just above that at
$5.64. coverage of levi strauz was initiated with an overweight rating. the price target is $26, the stock rose more than 6.5% to $23.97. still ahtrd, the infrture issue few ar >> two major industrial accidents, one man dead, both within 30 daysround houston, texas, and a visit by president trump. what they may have in to xhn coming up next on "nig"
american airlines has canceled its boeing 737 max flights through mid-august. united through early july. the announcements follow a similar decision b southwest. as you know, countries around the world grounded boeing 73 max planes in mid-march after two deadly crashes. one those crashes involved a lion airplane. in an interview with reuters, the co-founder of lion air lashed out at boeing's handling of the accident, saying boeing treated him asa, quote, piggy bank. f on plane s spent tens of orders with boeing. > if you've never heard of the chemical safety and hazard investigatn board known as the aloneou're not it is a small group of people who investigate industrial accidents. but president trump has been trying to eliminate the csb for three years, and inspectors have quit. someear that's helped to lead ton explosion, a fire, and a
death. brian sullivan is crosby, texas, tonight. > two terrible accidents in just amonth, both involving dangerous chemicals, both in texas, and both may have something in common. on march 17th a fire erupted at a facility near houston. l that fir to a leak and forced the coast guard to close part of the houston ship channel, one of america's most important economic arteries for nearly a week. two weeks later in early ril, an explosion ripping through a chemical plant in crosby, tes. one person was killed, two hurt, and schools were locked down to keep kids from inhalingom fumes he fire. >> you can always smell it in the air but never as strong, so we kind of had an idea,ha but ts ening right now, that terrified me. >> the two disasters have in common is a concern the agency charged with investigating industrial accidents, the chemical safety and hazard investigation board, hasn't been able to do its job
properly becauseee it's under attack from the white house. the president has tried for three years to kill the csb by eliminating funding. so far congress has kept the agency alive but a number of inspectors have let and a former executive says that's making the chemical industry more dangerous. >> eventually, there's no questi but that a weakened chemical safety board will lead to more accidents happening i the future because we won't have e investigations and recommodations that we need t prevent these accidents. >> president trump actually visited crosby, texas, on wwednesday. he there though to promote building on infrastructure for the oil and gas industry like new pipelines. no mention ofyhe dea fire. for now, the investigations continue as we speak. tithere are invtors from the csb inside the chemical facility behind us here in crosby, texas, where one man, james mangan, lost his life in a fire a couple weeks ago. it mains to be see whether or not in an industry worth
tebillions to the united s the headlines for all the wrong reasons that increased morale toll at the agency, the csb, are take its toll on important investigations like the one behind us. i'm brian sullivan. there's a new chief at best uy and that's where we begin tonight's markefocus. the current chief financial officer and 20-year vet become ceo in june. jolie was responsible for the electronic retailer's turnaround. he'll stay on as executive chairman. shares fell a fraction to $73.24. cesar's entertainment is close to naming a new ceo, this in the eover interes company. the current held of privately held affinity gaming is expected to take the top job. shares down 1% to $9.38. cannabis company alfreea reported a loss despite a rise innu re
they reported a decrease in the amount sold but an increase in the average selli price. the ceo says the industry is still young and it has a lot of free throw shooter ahe ahead of. >> what's important is industry where it's going, it's $150 billion industry growth. just in cannabis sales in canada by the end of 2020 so it's early >> but the stock fell more than $8.60. the match group is restructuring its executive team to focus on operations in easia. ompany is looking to capitalize on growth outside the unitpe states and eu match owns dating apps like ok cupid and tinder. the stock rose 5% to $60.18.ma el's shares were lower after a fisher-price unit voluntarily recalled all of its nd play sleepers following reports of more than 30 inft
deaths. the consumer product safety commis said consumers should immediately stop using the product. analysts say the sleeper accounts f of mattel's annual sales. the shares fell t3% $13.19. well, once a market leader health care is stumbling this year. according to "the wall street journal," the sector is lagging the broader market aftere being th best performing group in the s&p 500 last year. so let's shine the sector spotlight on health care. we're joined by brian camcila at jeffreys. nice to have you here. >> good evening. >> what do you thehk isd this? frequently we' when one sector has a good year, the next year it slows down a little bit. is there more to it than that? >> a very good question. if you take a look at the performance of health care over the last five years it's actually outperformedrretty well ohat period. but i think this year, what we're seeing is early signs or early entry of overhang from the
upcoming elections in 2020. so normally we see, you know, the election discussion com up 12 months to 14 months before the elections. now we're seeing about 18 to 20 months, a little earlier tn usual, so i think that's what' weighing on most of the health care sector toy. >> we each had a lot of activity in the health care sector, a lot of a mergers acquisitions, insurance companies buyingome of the pharmacy benefit managers. how much of that has kind of ittle off tors a guard? >> i think that's a good point. on one hand, you've got like you said the pharmacy managers now owned by the insurance companies, cigna and express ripts, united. so as we see more preugure on pricing or more scrutiny in congress on drug pricing in general, always in theha spotlit on issue, now that target basically has shifted to the insurance companies. we've seen some of tse deals.
question gets asked why are they doing these transformational transactions or big deals kind of out of left field? are they seeing something scaring these teams? i think investors are looking to these transactions as potential signs of trouble or concern from the industry itself. >> are there parts of the , industthough, that you are more bullish on than others? and if so, which ones? >> as we think about medicare for all and elections and all these things, right, the areas i'bullish on are home nursing, so you have nes such as lec group and the clinical lab space. the reason i'mbullish on these sectors is we're continuing to see ahift from expensive building-based settings to care delivery is moving more to the home and outside of hospitals. then on the lab side, the market is expanding, market share is moving to quest and lab core, the two big names in the space, so i think you'll see a grow acceleration in them the next two year
>> thank you so much. well, the next big test f the ipo market is pinterest. the digital pin board company plans to sell shares to invest ms ande its public market debut in the coming days. company is part of a wave of popular but unprofitable start-ups looking to sell ar . but what is pinterest and how does it make money? julia boarsin explains. >> they draw m26illion users every month, more than two-thirds of whom are female for everything from recipes to planning weddings to home remodeling. users save ideas by pinning them to boards and can be shared with friends or everyone. to navigate this content, pinners can follow friends, influencers or brands to see their pins or search for ideas. all of the revenue comes from advertising. what the companyalls promoted pins, bringing in more than $3 per user last year. businesses can share images and
links for free to followers. putting their promoted pins onto users home screerc or into sea results. pinterest enables brands to share video ads andhopping ads, which invite users to click to buy. and while pinterest doesn't take a cut of the sales, the more ads drive purchases, the more brands want to be on e pl. coming up, who got the biggest taxhi breaks tax season? and who got the biggest tax hike? here's a look at what to watch for tomorrow.
a handful of dow components report earnings. the major automakers show off their new high-tech and concept cars at the new york ao show, and the home builders sentiment report will tell us h industry feels about the state of its business. that's what to watch for on tuesda the mayor of south bend, indiana, yesterday threw his hat into the veryed cro 2020 presidential race. he recentlyalked to john harwood about his thoughts on e talking about on this tax day. >> we certainly need to consider a higher margeal tax rate for top income earners, not as high as historically, but when it was higher the american economy was growing well. we should consider a wealth tax. it makes sense. one of the things that's appealing about it is it's not very distorted compared to income tax and that's importan the least is the estate tax. so another thing we should think about is turning to a more
equitable use of the estate tax for the biggest and wealthiest estates. i' interested also if we can find the right way to implement it on a financial transactions tax because you sees preposter levels of wealth sometimes being created around these millisecond differences in financial transactions that nobody can explain whether it adds anyac al real value to the economy. >> he added tha the downside of any tax is that it can disincentivize ac >> this tax day is the first time mrilions of ans are seeing on paper the impact of president trump's tax cut. white house economic adviser larryay kudlow ss the tax cuts have helped the economy. >> got a very prosperous america with low unemployment, blue-collar woracrs are doing ally hig wages than we've had in years and they're doing better than the white-collar workers and everybody sharing in the prosperity.
>> who's paying what this t season? robert frank breaks down the numbers. >> it's the first tax day under theew tax de, and while most americans got a tax cut, there is a big g between the winners and the losers. the average american got a tax cut of about $1,200 for2018. generally the more you earn, the bigger your tax cut. the middle earners will see a 1.4% gain in after-tax income or about $800. whil thosen the top 5% will see a 3% gain averaging around $14,000. 60%top 20% of earners got of the benefit but the biggest losers will be the high earner if they live i high-tax states. at least 8% of taxpayers in new ifrk, new jersey, connecticut, and cnia will see tax increases because of the new limits on state and local tax deductions. and the more your income, the more you paid in added taxes. more than half of allhe tax
increases and the new law will fall on the top e1%. th who earn their money from salaries rather than companies or investments also got hit the hardstt. so the biginners are wealthy business owners and investors in low tax states like florida, texas, or washington state, especially if they invested in the stock market anf benefitem those corporate tax cuts that boosted stocks. the biggest losers are top earners who make their money from salaries and high-tax states like new york or california. supposed tolaw was make filing your taxes simpler. as of april, more than hal of all filers used a tax professional about the same as last year. for "nightly business report," i'm robert frank. here's a good stat for tax day. according to bespoket stock ma returns in the one and two weeks following the st
a better than average when compared to orier s. that might help ease some of the sting if you owe the government money this year. before we go, the final numbers on wall street, the dow down 27 points, the nasdaq felf. that is "nighpoy business " for tonight. i'm sue herera. thanks for joing us. we'll see you tomorrow.